Procedural Background and Annulment Application

This document is the final Decision of the ad hoc Committee constituted under the ICSID Convention to hear an application for the partial annulment of the Award rendered on 29 June 2023 in Rand et al. v. Republic of Serbia (ICSID Case No. ARB/18/8). The application was pursued solely by Mr. William Archibald Rand (the Applicant) against the Republic of Serbia (the Respondent). The Applicant sought annulment on two grounds under Article 52(1) of the ICSID Convention: manifest excess of powers (Article 52(1)(b)) and failure to state reasons (Article 52(1)(e)).

The Committee's Analysis on Manifest Excess of Powers

The Applicant's first ground for annulment alleged that the original arbitral tribunal manifestly exceeded its powers by declining jurisdiction over two components of his investment: (i) an indirect shareholding in the Serbian dairy farm BD Agro, and (ii) certain payments made on behalf of BD Agro. The Applicant argued the tribunal improperly elevated the criteria of the Salini test to jurisdictional requirements for the shareholding and misapplied the investment definition and its carve-outs in the Canada-Serbia BIT with respect to the payments.

The Committee, after reiterating the high threshold for annulment and the limited scope of its review, rejected this ground. It held that the tribunal's interpretation of "investment" under Article 25(1) of the ICSID Convention—as possessing an objective meaning requiring a contribution, duration, and risk—was tenable and well-supported by ICSID jurisprudence. Consequently, the tribunal's decision to decline jurisdiction over the indirect shareholding due to a lack of evidence of contribution was not a manifest excess of power. Similarly, the Committee found the tribunal's reasoning for declining jurisdiction over the payments—based on both a failure to meet the duration requirement and their exclusion as commercial transactions under the BIT—was at least arguable and therefore did not constitute a manifest excess of powers.

The Committee's Analysis on Failure to State Reasons

The Applicant's second ground for annulment focused on the tribunal's quantification of damages, alleging multiple failures to state reasons. The challenges centered on the valuation of BD Agro's assets and liabilities, particularly the valuation of its construction land. The Applicant contended the tribunal's reasoning was contradictory in its treatment of comparable transactions, its reliance on asking prices, its application of a 30% valuation discount, and its alleged failure to consider key evidence.

The Committee systematically addressed and dismissed each of these contentions. It found that the Applicant's arguments were, in substance, an attempt to relitigate the tribunal's assessment of complex factual and expert evidence. The Committee concluded that the tribunal's reasoning on valuation, while in parts concise, was discernible and not genuinely contradictory. It held that disagreements with a tribunal's weighing of evidence or its preference for one expert's methodology over another do not constitute a failure to state reasons for the purposes of annulment under Article 52(1)(e).

Decision and Costs

Having rejected all grounds for annulment, the Committee dismissed the Applicant's application in its entirety. In accordance with the principle that costs follow the event, the Committee ordered the Applicant to bear his own costs and to pay the full legal costs and expenses incurred by the Republic of Serbia in the annulment proceedings, plus interest. The Applicant was also ordered to bear all fees and expenses of the Committee and ICSID's administrative costs.